Mahalaxmi Ship Breaking Corporation V. Commissioner of Income Tax

ITR/70/1998

AI Insights

The case involves Mahalaxmi Ship Breaking Corporation, which sought deductions under sections 80HH and 80I of the Income-tax Act, 1961 for the assessment years 1988-89 and 1989-90. The primary legal question was whether the business of ship breaking qualifies as an 'industrial undertaking' that involves the manufacture or production of articles or things. The Appellate Tribunal had previously denied these deductions, leading to the reference to the High Court. The court referenced a similar case, Commissioner of Income-Tax v. Vijay Ship Breaking Corporation, where it was held that ship breaking does not constitute manufacturing or production for the purposes of these deductions. The court's decision was to uphold the Tribunal's decision, denying the deductions to the assessee.

• Counselvise Citation: [2004] 140 COUNSELVISE.COM (IT) 795688 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 15-01-2004
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income-Tax v. Vijay Ship Breaking Corporation, 2003 (261) ITR 113
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: MANISH BHATT
• Assessee Lawyers: R K PATEL
• Keywords: Assessment years; Deduction; Industrial Undertaking; Manufacture or Production; Ship breaking
• Section: 80HH; 80I

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 70 of 1998 For Approval and Signature: HON'BLE MR.JUSTICE M.S.SHAH and HON'BLE MR.JUSTICE A.M.KAPADIA ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- MAHALAXMI SHIP BREAKING CORPN. Versus COMMISSIONER OF INCOME TAX -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 70 of 1998 MR RK PATEL for Petitioner No. 1 MR MANISH R BHATT for Respondent No. 1 -------------------------------------------------------------- CORAM : HON'BLE MR.JUSTICE M.S.SHAH and HON'BLE MR.JUSTICE A.M.KAPADIA Date of decision: 15/01/2004 ORAL JUDGEMENT (Per : HON'BLE MR.JUSTICE M.S.SHAH) In this reference at the instance of the assessee, the following question is referred for our opinion, in respect of the assessment years 1988-89 and 1989-90: \"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the assessee is not entitled to the deduction under sections 80HH and 80I of the Income-tax Act, 1961 on the ground that the assessee's business of ship breaking was not an 'industrial undertaking' involving the manufacture or production of articles or things within the meaning of the said sections?\" 2. We have heard Mr. Mr. R.K. Patel, learned counsel for the petitioner - assessee and Mr. M.R. Bhatt, learned Standing Counsel for the revenue. 3. Our attention is drawn to the decision of another Division Bench of this Court in Commissioner of Income-Tax v. Vijay Ship Breaking Corporation, 2003 (261) ITR 113, taking the view that ship breaking activity was not an activity of manufacture or production of any article or thing for the purposes of availing of the benefit of deductions under sections 80HH and 80-I of the Income-Tax Act, 1961. Since the issue raised in the present reference is already decided by this Court against the assessee, we answer the question in the affirmative i.e., in favour of the Revenue and against the assessee. 4. At this stage, Mr. R.K. Patel, learned counsel for the petitioner - assessee, states that the aforesaid decision of this court has been challenged before the Hon'ble Supreme Court and the Hon'ble Supreme Court has granted leave to appeal and, therefore, he prays for certificate under Section 261 of the Income-Tax Act, 1961. 5. In view of the aforesaid statement that the SLP against the aforesaid decision is granted which statement is not disputed by the learned counsel for the Revenue, we certify this to be a fit case for appeal to the Hon'ble Supreme Court. 6. The reference accordingly stands disposed of. (M.S. Shah, J.) (A.M. Kapadia, J.) --- (karan) "